There are many ways to finance your car. The following are advantage and disadvantage about each of them:
Auto Financing through Car Dealership
Advantages: Convenience, fast, sometimes competitive
Disadvantages: Usually a little bit higher than bank loan.
Auto Financing through Bank or Credit Union
Advantages: Competitive interest rates, auto loans are usually simple interest loans (interest spread evenly throughout the term of the loan)
Disadvantages: Not as convenient as dealership financing, have to apply at the bank.
Auto Financing through Online Financial Institution
Advantages: Usually competitive rates, fast, easy
Disadvantages: Not a personal service; you need to read all the fine prints
Auto Financing through Home Equity Loan
Advantages: You may deduct some of the interest from your taxes; competitive rates
Disadvantages: You are adding your home to the risk.
Auto Financing through Family Member or Friend
Advantages: Since this is based on your past and current relationship it is flexible; competitive rates based on current bank rate.
Disadvantages: Could harm a good relationship
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